Why Skepticism Pays

Here's what ETF experts say investors should do to keep up with the explosion in new offerings.

Innovation is terrific. It has brought us jazz, the moon landing, drug-coated stents, and the iPhone. It has also brought us more than 150 new exchange-traded products last year and nearly 50 so far this year.

Truly, ETF providers love to crow about the innovation they're employing in their product development. With $1.7 trillion invested across more than 1,500 products, you'd think every conceivable investor need would be covered. Yet the industry keeps providing investors with more. The much-heralded innovation...